Hynix halts sales to spot chip market

Although far from recovery signs in the memory chip market continue to point

towards an improving economic environment. Korea's Hynix announced, for example,

that it will no longer sell memory chips on the spot market and will allocate

all of its output to strategic and contractual customers.

"We decided to apportion DRAM chips to strategic and contractual

customers for the first quarter of this year due to recent increased demand and

a supply shortfall," said Hynix Semiconductor America, the Silicon

Valley-based arm of the Korean company.

DRAM chips account for nearly 70 per cent of Hynix's sales. Prices of memory

chips have climbed steadily since December on concerns that the on-going

consolidation among top DRAM chip producers will lead to reduced supply when the

market recovers.

Already spot prices of 128 megabit DRAM chips have increased to $3.40 from

less than $1 last year. Steady rise in spot prices prompted Hynix to raise

contract chip prices since December. The Hynix move will likely result in a

further boost in DRAM spot prices, which in turn will help stabilize or boost

contract DRAM prices.